Tourism Project Finance Case Study

This case study explores various financing options for tourism-related projects. It discusses the European Social Fund and Regional Development Fund as potential sources of capital, highlighting their focus on enhancing employment and regional cooperation. Additionally, it examines equity financing through shares, noting its long-term nature and flexibility regarding dividend payments. The study also covers debt financing, a common method used by businesses and governments, emphasizing the importance of interest rates and the availability of fixed and floating options. The case study provides a comprehensive overview of different financial avenues available for tourism projects.

European social fund: Capital projects needed huge amount of finance and in order to finance projects related to
tourism European social fund can be used by relevant entity. This fund was set up in order to enhance employment
level in the European nations (CUI and SUN, 2011). Thus, this fund is used to support projects that can play an
important role in increasing employment in the specific nation. Travel and tourism related projects can be finance by
raising a fund from the European social fund
 Regional development fund: Apart from the
European social fund regional development fund is another source from which huge amount of money can be raised
to finance the project. The main aim of setting this sort of fund was to promote regional cooperation in the Europe. In
large number of the nations of the mentioned continent this fund was used to provide finance to many projects.
Elevation in employment is another objective behind setting this fund. Hence, through the regional development fund
project related to tourism can be fund. Shares: It is the one the commonly used source of finance. It is widely used long term source of finance. Under this
source of finance for long time period amount can be arranged by the business firm. Interesting fact is that in case of
this source of finance it is not necessary to pay dividend to the shareholders in each and every financial year. Hence,
it can be said that equity is the one of the best source of finance that is available to finance projects related to the
travel and tourism business.
 Debt: It is the source of finance that is commonly available to the business firms. This source of finance is commonly used by the business firms
irrespective of their size whether they are large, medium or small in size. Apart from the business firms government is another entity that widely
used debt to finance the projects (A primer to public private partnership in infrastructure development, 2008). The rate of interest is the
finance cost that is paid by debtor to the creditor. Debt is available at the fixed and floating interest rate. Fixed interest rate refers
to the rate of finance cost that remains fixed and never get changed.